FINANCIAL STATEMENTS · 2017. 8. 31. · STATEMENT OF CASHFLOWS 30 - 31 NOTES TO THE FINANCIAL STATEMENTS 32 - 59 2 VALLEYS TO COAST HOUSING LIMITED. INFORMATION BOARD MEMBERS (as

VALLEYS TO COAST HOUSING LIMITED(Registered Society with charitable rules)

Registration Number: 30205R

FINANCIAL STATEMENTS31 MARCH 2017

CONTENTSINFORMATION 3 – 4

BOARD REPORT - STRATEGIC REVIEW 5 - 14

BOARD REPORT 15 - 24

AUDITOR’S REPORT TO THE MEMBERS 25 - 27

STATEMENT OF COMPREHENSIVE INCOME 28

STATEMENT OF CHANGES IN RESERVES 28

STATEMENT OF FINANCIAL POSITION 29

STATEMENT OF CASHFLOWS 30 - 31

NOTES TO THE FINANCIAL STATEMENTS 32 - 59

VALLEYS TO COAST HOUSING LIMITED2

INFORMATION

BOARD MEMBERS (as at 31 March 2017)

INDEPENDENT BOARD MEMBERS: Neil Edward Harries - ChairJohn Daniel Kinder – Vice Chair Cheryl Tracy

TENANT BOARD MEMBERS: Sarah Jane HayAndrew Ireland

COUNCIL BOARD MEMBERS: Dhanisha Dilipkumar PatelHailey Janet TownsendHywel Williams

CO-OPTEES: Elisa Margaret FaulknerJoanne Louise Smith Liam Christopher BevanMark Orest Omelan Woloshak

OTHER INFORMATION

REGISTERED OFFICE: Tremains Business ParkTremains RoadBridgendCF31 1TZ

COMPANY SECRETARY: Alun Parry Rawlins (to 31 July 2017)Sarah Jane Prescott (from 1 August 2017)

EXTERNAL AUDITORS: Bevan & BucklandLangdon HouseLangdon RoadSwansea SA1 8QY

INTERNAL AUDITORS: Barcud Shared ServicesTremains Business ParkTremains RoadBridgendCF31 1TZ

FINANCIAL STATEMENTS - 31 MARCH 2017 3

INFORMATIONSOLICITORS: Capital Law Blake Morgan LLP

Tyndall Street One Central SquareCardiff CardiffCF10 4AZ CF10 1FS

Hugh James Geldards LLPHodge House Dumfries House114 – 116 St Mary Street Dumfries PlaceCardiff CardiffCF10 1DY CF10 3ZF

Trowers & Hamlins LLP55 Princess StreetManchesterM2 4EW

BANKERS: Lloyds Banking GroupCommercial BankingSt William HouseTresilian TerraceCardiffCF10 5BH

FUNDERS: Nationwide Building Society Principality Building SocietyKings Park Road Principality BuildingsMoulton Park Queen StreetNorthampton CardiffNN3 6NW CF10 1UA

M&G InvestmentsLaurence Poultney HillLondonEC4R 0HH

WELSH GOVERNMENT REGISTRATION NO: L137

COMPANY REGISTRATION NO: 30205R

Registered Society with charitable rules under the Co-operative and Community Benefit Societies Act 2014


BOARD REPORT - STRATEGIC REVIEWValleys to Coast Housing Limited (V2C) is a not for profit organisation administered by a voluntary boardof management. It provides management, maintenance and improvement services to 5,835 rentedhomes, all within the administrative boundary of Bridgend County Borough Council (BCBC).

V2C also provides management services to 722 leasehold flats, has a portfolio of 50 shops and othernon-residential properties let on commercial terms, and manages 1,129 garages.

V2C was established through a stock transfer from BCBC in September 2003 with the aim of improvingour customers’ homes and working with other organisations to support the wider community.

The organisation’s mission is:

To provide homes in thriving communities where people feel safe and want to live.

The board is currently reviewingits strategic priorities basedaround four key themes:

• Customers at the Heart

• Thriving Communities

• Desirable Homes

• Successful Organisation.

Specific outcomes and tasks willbe developed with tenants, staffand stakeholders during 2017/18.

The new strategic plan will buildupon the work identified andcompleted in the previous twoyears, and some of the keyachievements from the last 12months are set out on thefollowing pages.

Thrivingcommunities

Desirablehomes

Successfulorganisation

Customers at the heart


Putting Customers at the Heart

Reggie Road show

Reggie Road Shows have continued toensure staff meet customers in their owncommunities instead of them making ajourney to our offices.

The Money Matters team have used Reggie,the information van, to deliver advice andguidance on maximising customer’s income,reducing their outgoings and updating themon the welfare reform changes.

PDSA Pet Checks

Twice a year, we work with the PDSA team todeliver free pet health checks.

These health checks encourage customers tocome along and speak to us about anyhousing queries they may have.

We invite other partners to attend. This yearBCBC attended to provide advice on the newrecycling scheme.

Customer Profiling

From our customer profiling information and a series of individual interviews we created a numberof customer ‘personas’ which help us identify the varying needs and aspirations of the broad rangeof customers living in V2C homes, and tailor our services accordingly.


Nolton Court Resource Centre

Using our town centre offices at Nolton Court,V2C has partnered with:

• Adult Community Learning

• BAVO

• Communities For Work

• Job Centre

Plus we provide drop-in sessions for digitaland financial inclusion to help improveemployability and skills.

Managing our vacant homes

We now offer incentives to customers who are endingtheir tenancy to allow access to their homes so we cancarry out inspections prior to the tenancy ending.

This enables us to organise work that is necessary tothe property before it is empty so we can get it ready fora new tenant much quicker.

V2C on your Doorstep

We understand that some of our communities arefurther away than others. Therefore we decided to takeour services out to all corners of Bridgend County.

We assisted with various things such as:

• Benefits & Budgeting

• Help Finding a New Home

• Reporting Repairs

• Discuss Any Tenancy Issues

These events were very successful and we plan to buildon these in the future.


Enable – Support for Independent Living

We have more recently worked with Welsh Government to develop their ‘Enable – Support forIndependent Living’ system.

The system is designed to simplify and speed up the process of getting an adaptation undertaken.Housing adaptations are vital in enabling customers to remain living independently and safely intheir own home and can transform a person’s quality of life.

Some customers may need something as simple and easy to provide as a handrail. Others couldneed something much larger and more complex like an extension to their home or a through-floorlift. Part of the work that the Enable scheme does is to provide flexibility and responsiveness to anindividual’s needs.

Once a need for an adaptation has been identified, the system has been designed to determine themost effective way to deliver adaptations.

Installation of Carbon Monoxide (CO) Alarms

During the 2016/17 financial year, we rolled out a programme for theinstallation of Carbon Monoxide (CO) Alarms throughout our homes.

Both smoke alarms and CO alarms have been installed to provideour customers with added re-assurance and help ensure safety inthe home.


Supporting thriving communities

Space Saviours

The Space Saviours continued to develop better uses of unlovedspaces across South Wales with Monmouthshire Housing andNewydd the latest to join us in what is now a jointly-fundedservice, hosted by us.

Residents of the Oakwood estate in Maesteg have designed askate park and natural play area that are under construction. InPencoed, alongside charity Sustrans, a trial was carried-out fora new Safer Streets layout to improve both parking and playprovision.

Community Benefits

Community Benefit in 2016/17 has continued to bea useful method to bring resources into V2Ccommunities by working in partnership with ourcontractors and suppliers.

Wates and Centregreat contributed to a fun day inEvanstown which was entirely created-by andrun-for local residents.

Design consultants Arcadis hosted a Bridgendstudent with a work placement.

ASW contractors took their staff along to completesome garden beds for the residents of the Ger Y Nant older person scheme.

Street Games

We worked with the charity ‘Street Games’ offeringopportunities for young people between the ages of 15-25 tolearn new skills and coaching techniques to deliver activities intheir communities.


Recycling

We take our environmental responsibilities seriously and arecommitted to reducing waste.

In 2016 we developed a partnership with Emmaus to recyclediscarded and unwanted furniture from our empty properties.These items are then checked over, repaired or restored andthen offered for sale via the Emmaus shop on Tremains Road.

There have also been examples where unwanted furniture hasbeen recycled by our Community Caretakers directly to ourcustomers at no cost.

Team V2C - Doing more in our communities

We held six staff volunteer events in 2016-17.

We took on planting donated trees, painting a public park, a community centre, creating raisedplanter beds, litter picking, flower planting and weed clearance. Events were held in Caerau,Blackmill, Betws and around our sheltered schemes.

We were supported in all these activities by Brian Jones, Keep Wales Tidy Officer, and joined bycommunity members, staff from the fire service and other agencies.


Providing desirable homes

V2C’s Development Team

We continue to increase the number of homes we provide to meet the growing and varied needs ofpeople across the borough, which is an important part of our work. But it is not just about numbers– it is about providing the right homes in the right location for the right people and since our lastreport we have:

• Completed 12 new homes in Porthcawl

• Completed 2 bungalows in Maesteg for people with learning disabilities.

• Built 18 new homes in Maesteg, consisting of 15 flats and three houses.

• Repurchased 11 flats and 1 house in various areas across the borough from Porthcawl toLlangynwyd with another 9 lined up for purchase early in the next financial year

Our buyback programme allows us to provide further homes which provide additional choice forour tenants within our established estates. This also allows us to improve the blocks of flats moreeffectively to provide a better environment both externally and internally to communal areas. Anexample is our major external improvement programme currently being undertaken in Wildmill.

We are committed to looking forward, with new schemes being created continuously and wecurrently have a future programme for 84 new homes in our secure and committed pipeline ofwork.


V2C’s Project Team

During the year, our Projects Team continued to undertake large scale improvement works to ourhomes.

In Porthcawl, we started a major project to refurbish and repair the external fabric of blocks of flatsin the area. The works also included replacement of entrance doors where required and parkingresurfacing in certain areas.

In our Ger Y Nant Sheltered Scheme, we re-modelled the entrance area including provision of a fullyaccessible secure door entry system, redecorated and refurbished the communal areas to ensureRNIB compliance and updated the communal area furniture appropriate to the environment. Theworks also provided new storage and recharging facilities for mobility scooters.

We also completed various full re-roofing projects in Maesteg, Cefn Cribbwr and Sarn.

We commenced garden improvement works in the Cefn Glas area.

We commenced major internal and external refurbishment and remodelling projects at Pen y Bryn,Bryntirion and Nanthir Lodge in Blaengarw.


Building a successful organisation

Gold Level Corporate HealthStandard

We retained the Gold Level Corporate Health Standardaward – this is a framework and award for health andwell-being in the workplace supported and funded bythe Welsh Government.

Training

Over 3,800 hours of training was provided tocolleagues last year, in addition we sponsored 10colleagues to undertake a further education course.

Two staff members successfully completed ourinternal leadership programme. This supportednewly promoted managers and prepared staff forfuture opportunities.

Job Evaluation

We undertook a full job evaluation exerciseand salary scale review to ensure ouremployees are paid competitive rates of pay.

Apprenticeships

The board made a conscious decision toincrease the number and range ofapprenticeships offered and during 2016/17we had 7 apprentices distributed betweentrade and office staff.


New IT Systems

To respond to the changing external environment andto deliver better service to our customers, we deliverednew IT systems to enable us to achieve this, theseinclude:

• Total Repair booking system, to enable staff to efficiently book repairs to customers.

• Documotive system allows us to manage tenancies within the community.

• SharePoint upgrade allows staff to work collaboratively and share work information acrossdepartments.

We might be a big company but our values are strong. We are committed to being the best and helpingothers reach their full potential too.

We take equality and diversity seriously and believe that every individual can make a difference.

We celebrate the diversity of opinions, skills and life-experiences within the business and communityand know that by doing so we are building a more successful organisation.



BOARD REPORT

PRINCIPAL ACTIVITIES

Valleys to Coast Housing Limited (the Company) is a Registered Society with charitable rules under theCo-operative and Community Benefit Societies Act 2014.

The Company is a not-for-profit organisation administered by a voluntary Board of Management. TheCompany operates within the Bridgend County Borough Council local authority area.

The Company’s principal activities are the improvement, management and development of housing forrent.

KEY ACCOUNTING POLICIES

The principal accounting policies are set out in Note 1 to the financial statements.

PERFORMANCE FOR THE YEAR

The Board reports a surplus for the year before actuarial gains of £1.6 million as shown in the Statementof Comprehensive Income. As at 31 March 2017 the Company has net assets of £39.3 million as shownin the Statement of Financial Position.

During the year the Company invested £24.9 million on reactive and cyclical repairs, planned repairs,improvement of housing properties and new development, financed through internal financing of £23.4million, additional loans of £1.0 million, and social housing and other grants of £0.5 million. Details ofchanges to the Company’s fixed assets are shown in notes 9, 10 and 11 to the financial statements.

POST BALANCE SHEET EVENTS

The Board consider that there have been no other events since the financial year-end that have had asignificant effect on the financial position of the Company.

The above Board members have held office during the whole of the year and to the date of this reportunless otherwise stated. The Board members are drawn from a wide background bringing togetherprofessional, commercial, tenant and local experience.

The senior officers are the Chief Executive, the Director of Operations/Deputy Chief Executive & theDirector of Resources/Company Secretary.

BOARD MEMBERS AND SENIOR OFFICERS

INDEPENDENT BOARD MEMBERS:

Neil Edward Harries - Chair

John Daniel Kinder - Vice Chair

Helen Perkins – Vice Chair(retired 28 September 2016)

Cheryl Tracey (appointed 28September 2016)

CO-OPTEES:

Liam Christopher Bevan(appointed 19 September 2016)

Elisa Margaret Faulkner

Joanne Louise Smith(appointed 19 September 2016)

Cheryl Tracy(to 28 September 2016)

Mark Orest Omelan Woloshak(appointed 19 September 2016)

COUNCIL BOARD MEMBERS:

Dhanisha Dilipkumar Patel

Hailey Janet Townsend (resigned 5 May 2017)

Hywel Williams

TENANT BOARD MEMBERS:

Sarah Jane Hay

Andrew Ireland(resigned 15 May 2017)

Maria-Louise Healy(resigned 20 February 2017)

Sue Rhodes(appointed 15 May 2017)


KEY PERFORMANCE INDICATORSKey Performance Indicators, as reported either to the Welsh Government or internally, are set out in thefollowing table:

• Arrears – The total value of current tenant arrears at the year-end (net of unpaid direct HousingBenefit) as a percentage of the annual rent debit – Arrears at 1.99% are higher than the target of1.40% and reflects the trend seen in the last years following the benefit changes resulting fromwelfare reform. Whilst the increase in the arrears as a percentage of current rent arrears isdisappointing our performance is good compared to similar housing organisations in Englandand Wales.

• Empty homes loss percentage – The cumulative value of void loss as a percentage of the annualrent debit – Losses from empty homes at 1.80% is slightly better than the target of 1.89% andreflects a performance which continued to improve during the financial year.

• The average time taken to complete repairs – our performance is better than target for allcategories of repairs; emergency, urgent and non-urgent and compare favourably with theprevious financial year.

2016/17Actual

2016/17Target

2015/16Actual

2014/15Actual

2013/14Actual

Arrears 1.99% 1.40% 1.71% 1.47% 1.40%

Empty homes loss percentage 1.80% 1.88% 2.14% 2.17% 1.67%

Average time taken to completerepairs:

- Emergency 3.6 hours 5.0 hours 4.8 hours 4.2 hours 5.8 hours

- Urgent 3.3 days 5.0 days 2.9 days 2.7 days 2.8 days

- Non-urgent 9.2 days 15.0 days 8.1 days 8.3 days 12.8 days

Annual housing managementcost per unit

£624 £640 £607 £573 £597

Annual total cost of maintenanceper unit (revenue)

£1,809 £1,785 £1,853 £2,000 £1,733

Annual total cost of plannedmaintenance and improvementsper unit (capital)

£898 £990 £951 £1,320 £1,501

Total maintenance andimprovement costs per unit(revenue and capital)

£2,707 £2,775 £2,804 £3,320 £3,234


• Annual housing management cost per unit – The housing management cost per unit provides ameasure of how efficient the Company is in terms of the management of the portfolio of tenantedproperties. It includes all direct salary costs for housing management staff, together with costssuch as insurance, tenant participation, costs of rent collection as well as a fair apportionment ofoverhead and office costs. It does not include estate costs which could be recovered through thecharging of a service costs. The actual cost per unit at £624 is 2.5% lower than the budgetassumption. Housing Management costs were budgeted to be higher than last year to reflect theincreasing demands due to welfare reform changes

• Annual total cost of maintenance per unit (revenue and capital) – The total cost of maintenanceper unit provides a measure of how costly it is for the Company to maintain its stock. It includes allroutine and cyclical maintenance and the cost of major repairs and improvements, charged to theIncome & Expenditure Account (revenue) or charged to the Balance Sheet (capital). The totalmaintenance cost (revenue and capital) per unit at £2,707 was £68 per unit less than the budgetof £2,775 per unit and was primarily due to lower spend than budgeted on major repairs andimprovements. The total cost also includes the cost of administration and management of themaintenance functions of the Company. In the year to 31 March 2017 this represented £267 perunit or 9.9% of the total works cost compared to £281 per unit or 10.0% last year.

OBJECTIVES FOR BUSINESS GROWTH

The Company’s Objectives for Business Growth for the next 5 years are set out in the 30 year FinancialPlan 2017/18 - 2046/47, which was approved by the Board in September 2016. The key assumptionsand targets within the Financial Plan (adjusted for the actual results for the financial year ended 31March 2017) are as follows:

• Stock Numbers – The number of rented properties is projected to increase from 5,835 at the 31March 2017 to 6,125 at 31 March 2022, primarily due to the development of new rented propertiesover the next 4 years to 31 March 2021;

• Statement of Comprehensive Income – Turnover is projected to increase from £27.8 million in theyear to 31 March 2017 to £32.8 million in the year to 31 March 2022; an increase of 18%, whereasoperating costs will increase from £23.9 million in the year to 31 March 2017 to £26.8 million in theyear to 31 March 2022, an increase of 12%. Net Interest costs are projected to increase from £3.23million in the year to 31 March 2017 to £3.38 million in the year to 31 March 2022, an increase of5%;

• Statement of Financial Position – Net assets are projected to increase from £39.2 million at 31March 2017 to £69.9 million by 31 March 2027. Cumulative loan draw-downs are projected toincrease from £56.1 million at 31 March 2017 to a peak debt of £72.9 million at 31 March 2020;and then falling back to £47.7 million at 31 March 2027, based on the assumption of a newdevelopment programme for the next 4 years only.


REMUNERATION

PolicyThe Remuneration Committee is responsible for setting the remuneration policy for all staff. It agreesthe appointment of senior officers and their remuneration, as well as the brief within which the ChiefExecutive can negotiate staff salaries.

The Remuneration Committee pays close attention to remuneration levels in the sector indetermining the remuneration packages of the executive directors and other senior staff. Basicsalaries are set having regard to each executive director and other senior staff’s responsibilities andpay levels for comparable positions.

Prior to 1 April 2008 the remuneration of staff not reviewed by the Remuneration Committee wassubject to contractual conditions that were covered by Transfer of Undertaking and Protection ofEmployment (TUPE) requirements. From 1 April 2008 the Company departed from the National JointCouncil (NJC) pay scales for all staff. Following a comprehensive job evaluation exercise spot salarieswere set for all staff with annual reviews subject to cost of living, the market, and performanceassessments within the context of organisational affordability.

Service contractsThe senior officers are appointed on permanent contracts with a six month period of notice.

PensionsTwo senior officers are members of a defined benefit final salary SHPS pension scheme and onesenior officer is a member of the defined benefit Career Average Re-valued Earnings SHPS pensionsscheme. The senior officers participate in the schemes on the same terms as all other eligible staff.The Company contributes to the schemes on behalf of its employees.

Other benefitsThe senior officers are entitled to other benefits such as the provision of a leased car allowance. Fulldetails of senior officers’ remuneration packages are included in note 8 to the audited financialstatements.

EMPLOYEES

The strength of the Company lies in the quality and commitment of its employees. The Company’s abilityto meet its objectives and commitments to tenants in an efficient and effective manner depends on thecontribution of employees throughout the Company.

The Company continues to provide information on its objectives, progress and activities through regularoffice and departmental meetings.

The Company is committed to equal opportunities for all its employees and, in particular, supports theemployment of disabled people, both in recruitment and in the retention of employees who becomedisabled whilst in the employment of the Company.


HEALTH AND SAFETY

The Board is aware of its responsibilities on all matters relating to health and safety. The Company hasprepared detailed health and safety policies and provides staff training and education on health andsafety matters.

CORPORATE GOVERNANCE

The Company has adopted Community Housing Cymru’s (CHC) Code of Governance. We are pleased toreport that, in all material respects, we comply with the principal recommendations of the Code ofGovernance.

With regard to the new Regulatory Framework issued by Welsh Government in May 2017 we arepleased to report that there are no areas of non-compliance.

The Board reports below on how it seeks to achieve effective housing association governance:

The BoardThe Board comprises up to twelve non-executive members and up to 5 co-optees and is responsiblefor managing the affairs of the Company. It meets eight times a year for regular business and alsomeets to discuss strategy and for members’ training.

The Board is responsible for the Company’s strategy and policy framework. Day-to-daymanagement and implementation of that framework is delegated to the Chief Executive and othersenior officers who meet regularly and attend Board meetings.

CommitteesThe Board has three Committees, an Audit Committee, a Remuneration Committee and an ExecutiveCommittee (Schedule 1).

The Audit Committee comprises a minimum of three Board members and meets at least three timesa year. It considers the appointment of internal and external auditors, the scope of their work andtheir reports, as well as monitoring risk management.

The Remuneration Committee comprises a minimum of three Board members and meets at leastonce a year. It reviews remuneration of all staff in accordance with the Company’s RewardFramework Policy.

The Executive Committee (Schedule 1) is convened by the Chair when urgent matters, relating toSchedule 1 of the Housing Act 1996, cannot wait until the next Board Meeting. The ExecutiveCommittee is made up of three Board Members (including the Chair or Vice-Chair) and wouldnormally reach a decision by responding to written information rather than actually meeting.

The Board and its Committees obtain external specialist advice from time to time as necessary.



The Company’s Corporate and Business Plans establish the overall objectives and strategy in respect ofrisk management. The risk strategy reflects:

• risk appetite: the types and levels of risk that are considered acceptable including an assessmentof time over which risk can be taken. The Company’s risk appetite is agreed for each individualstrategic risk by the Audit Committee. Where a strategic risk is found to not be within theCompany’s risk appetite action is taken to put in place further controls, or assurances are soughtthat the identified controls are operating effectively;

• risk response: the different responses attached to risks (acceptance, management, modification,elimination & contingency or recovery plan);

• policy setting: where risks levels and responses can be determined policies should beestablished.

Within the Risk Management Policy it is acknowledged that the Board retains overall responsibility forrisk. Day-to-day management of risks is formally assigned to the Executive Management Team. TheBoard’s objective in doing so is to:

• encourage a culture of risk awareness;

• ensure risks remain well controlled;

• ensure accountability and responsibilities are clear; and

• create a structure for the provision of reporting on the management of risk to ExecutiveManagement Team and the Board.

Identification of risk is conducted in a structured way to cover:

• Legislative changes / welfare benefit reforms;

• Maintaining positive working relationships with our local authority partner;

• Managing the new regulatory environment;

• Ensuring positive and effective governance during challenging times;

• Providing effective systems to ensure the health & safety of colleagues, contractors andcustomers;

• Delivering a service charge strategy across the whole of our housing stock.

GOING CONCERN

Under the governance requirements, the Board confirms that after making enquiries they have areasonable expectation that the Company has adequate resources to continue in operational existence forthe foreseeable future. Accordingly, they have adopted the going concern basis in preparing the accounts.


INTERNAL CONTROL

The Board bears responsibility for ensuring that the organisation operates a secure control environment.The controls serve to give reasonable assurance with regard to:

• the reliability of financial information used within the Company and for publication;

• the maintenance of proper accounting records; and

• the safeguarding of assets against unauthorised use.

The Board is responsible for establishing and maintaining systems of internal control. Such systemscannot provide categorical assurance against material financial misstatement or loss, but can beexpected to provide reasonable assurance.

Key elements in ensuring a secure environment include:

• the presence of formal policies and procedures;

• clear delegation of authority;

• a performance development framework;

• performance development reviews;

• an appropriate level of experienced and suitably qualified staff;

• the performance monitoring of forecasts and budgets;

• the identification, evaluation and management of significant risks;

• a policy on fraud prevention, detection and reporting, and the recovery of assets;

• suitable authorisation of major commitments which might put the Company at risk; and

• a robust and independent internal audit service, reporting appropriately to members, withsuitable follow-up mechanisms in place.

The Audit Committee has reviewed the effectiveness of the system of internal control in the Company forthe year ended 31 March 2017. No weaknesses were found in internal controls which resulted inmaterial losses, contingencies or uncertainties which require disclosure in the financial statements or inthe Auditor’s Report on the financial statements and the Board are not aware of any such weaknessesfrom 1 April 2017 to date.

DIRECTORS INDEMNITY

The Board has confirmed that the Company does have Directors and Officers Insurance in place.

TREASURY MANAGEMENTThe Company has a treasury operation within the Finance Department, whose primary function is tomanage liquidity, funding, investment and the Company’s financial risk, including risk from volatility ininterest rates and counterparty credit risk.

The Company defines its treasury management activities as “The management of its cash flows,banking, money market and capital market transactions; the effective control of the risks associated withthese activities; and the pursuit of optimum performance consistent with those risks.”

The Company regards the successful identification, monitoring and control of risk to be the prime criteriaby which the effectiveness of its treasury management activities is measured. Accordingly, the analysisand reporting of treasury management activities focus on risk implications for the Company.

The Company acknowledges that effective treasury management provides support towards theachievement of its business and service objectives. We are therefore committed to the principles ofachieving best value in treasury management, and to employing suitable performance measurementtechniques, within the context of effective risk management. The treasury operation is not a profit centreand the objective is to manage risk on a cost effective basis; speculative transactions are not permitted.

Treasury policies are reviewed and approved annually by the Board. Our treasury policy does permit theprudent use of derivative instruments to hedge interest rate risks, where appropriate and subject to theapproval of the Welsh Government. Our treasury policy also states that we will endeavour to ensure thatour borrowings contain a mix of fixed and variable rate structures and our current Annual TreasuryStrategy states that variable rate funding will not exceed 30% of the total debt outstanding. At 31 March2017 91.5% of the total loan facilities of £60.1m are on fixed rates.

The Company does not have any abnormal exposure to price, credit, liquidity and cash flow risks arisingfrom its trading activities. The Company does not enter into trading transactions in financial instruments,but has arranged simple interest rate hedging through fixing of rates for not less than 70% of projectedloan drawdown requirements over the next five years.

STATEMENT OF FINANCIAL POSITION, DEBT & LIQUIDITYThe Company’s financial instruments comprise cash, short term investments and borrowings. Regardingliquidity, as the improvement and the provision of housing is a long term business; the Company’s policyis to finance it primarily through medium and long term borrowings. In May 2017 the Companycompleted a new financing exercise; as a result the total loan facility is now £70.1m made up of:

• A £5 million variable rate revolving loan facility, funded by the Nationwide and Principality BuildingSocieties, which can be drawn and repaid and redrawn, as our financial requirements fluctuate,until the 31 March 2020;

• A £20.1 million fixed rate long term facility, funded by the Nationwide and Principality BuildingSocieties, which must be fully repaid by 31 March 2025;

• A £10 million fixed rate long term facility, funded by the Nationwide Building Society, which alsomust be fully repaid by 16 December 2028;

• A £25 million fixed rate Note Purchase Agreement, facilitated by M&G Investments, which must befully repaid by 31 March 2045;

• A £10 million fixed rate Note Purchase Agreement, facilitated by M&G Investments, which must befully repaid by 31 March 2052.

• Two interest free loans totalling £1.1million, funded by Welsh Government, which must be repaidbetween June 2019 and March 2022.


STATEMENT OF BOARD’S RESPONSIBILITIES

The Board is responsible for preparing the report and financial statements in accordance withapplicable law and regulations.

Housing Association legislation requires the Board to prepare financial statements for each financialyear. Under that law the directors have elected to prepare the financial statements in accordance withUnited Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards andapplicable laws, including FRS102) Under the Housing Association legislation the Board must notapprove the financial statements unless they are satisfied that they give a true and fair view of the stateof affairs and surplus or deficit of the Company for that period. In preparing these financial statements,the Board are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards and the Statement of Recommended Practice(SORP) Accounting by Registered Housing Providers SORP 2014, have been followed, subject to anymaterial departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presumethat the Company will continue in business.

The Board is responsible for maintaining an adequate system of internal control and keeping properaccounting records which disclose with reasonable accuracy at any time the financial position of theCompany and enable them to ensure that the financial statements comply with the Co-operative andCommunity Benefit Societies Act 2014, the Housing and Regeneration Act 2008, and the AccountingRequirements for Registered Social Landlords General Determination (Wales) 2015. It is also responsiblefor safeguarding the assets of the Company and hence for taking reasonable steps for the preventionand detection of fraud and other irregularities.

In so far as each of the Board members are aware:

• there is no relevant audit information of which the Company's auditors are unaware; and

• the Board members have taken all steps that they ought to have taken to make themselves awareof any relevant audit information and to establish that the auditors are aware of that information.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held on 27th September 2017.

Approved by the Board on 31st July 2017and signed on its behalf by:

Chair of the Board


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERSOF VALLEYS TO COAST HOUSING LIMITEDIn addition to our audit on the financial statements for the year ended 31 March 2017, we have reviewedthe Board's statement of Valleys to Coast Housing Limited's (the Company) compliance with the WelshGovernment Circular 02/10, Internal Financial Control and Financial Reporting ("the Circular").

The objective of our review is to enable us to conclude on whether the Board has provided thedisclosures required by the Circular and whether the statement is consistent with the information ofwhich we are aware from our audit work on the financial statements.

We are not required to form an opinion on the effectiveness of the Company's corporate governanceprocedures or its internal financial control.

OPINION

With respect to the Board's statement on internal financial control on page 22, in our opinion the Boardof Management has provided the disclosures required by the Circular and the statement is consistentwith the information of which we are aware from our audit work in the financial statements.

Bevan & BucklandChartered Accountants and Statutory AuditorsLangdon HouseLangdon RoadSwansea SA1 8QY

21st August 2017


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERSOF VALLEYS TO COAST HOUSING LIMITEDWe have audited the financial statements of Valleys to Coast Housing Limited (the Company) for the yearended 31 March 2017 which comprise the statement of comprehensive income, statement of changes inreserves, statement of financial position, cashflow statement and the related notes. The financialreporting framework that has been applied in their preparation is applicable law and United KingdomAccounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 “TheFinancial Reporting Standard applicable in the UK and Republic of Ireland”.

Respective responsibilities of the Board and the auditorAs explained more fully in the Statement of Board’s Responsibilities set out on page 24, the Board isresponsible for the preparation of financial statements and for being satisfied that they give a true andfair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance withapplicable law and International Standards on Auditing (UK and Ireland). Those standards require us tocomply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statementssufficient to give reasonable assurance that the financial statements are free from materialmisstatement, whether caused by fraud or error. This includes an assessment of whether theaccounting policies are appropriate to the group’s circumstances and have been consistently appliedand adequately disclosed, the reasonableness of significant accounting estimates made by the Boardof Management, and the overall presentation of the financial statements. In addition, we read all thefinancial and non-financial information in the financial statements to identify material inconsistencieswith the audited financial statements. If we become aware of any apparent material misstatements orinconsistencies, we consider the implications for our report.

Opinion on financial statementsIn our opinion the financial statements;

• give a true and fair view of the state of the Company’s affairs as at 31 March 2017 and of itsincome and expenditure for the year then ended; and

• have been properly prepared in accordance with United Kingdom Generally Accepted AccountingPractice; and

• have been properly prepared in accordance with the Co-operative and Community Benefit SocietyAct 2014, the Housing and Regeneration Act 2008 and the Accounting Requirements forRegistered Social Landlords General Determination (Wales) 2015.


INDEPENDENT AUDITOR’S REPORT TO THE MEMBERSOF VALLEYS TO COAST HOUSING LIMITEDMatters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Industrial and ProvidentSocieties Acts, 2014 require us to report to you if, in our opinion;

• a satisfactory system of control over transactions has not been maintained; or

• the Company has not kept proper accounting records; or

• the financial statements are not in agreement with the books of account; or

• we have not received all the information and explanations we need for our audit.

Bevan & BucklandChartered Accountants and Statutory AuditorsLangdon HouseLangdon RoadSwansea SA1 8QY

21st August 2017


STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2017

The Company’s turnover and expenses all relate to continuing operations.

Note2017£’000

2016£’000

TURNOVER 2 27,804 26,899

Operating Costs 2 (23,911) (23,041)

OPERATING SURPLUS 2 3,893 3,858

SHPS Pension Deficit Contributions 23 - (184)

Surplus on disposal of property, plant and equipment 3 952 577

Interest receivable 32 52

Interest and financing costs 4 (3,259) (3,516)

SURPLUS FOR THE YEAR ON ORDINARY ACTIVITIES 6 1,618 787

Taxation on Surplus for the Year 5 - -

SURPLUS FOR THE YEAR AFTER TAX 18 1,618 787

Total Actuarial Gains 22 600 1,880

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,218 2,667

STATEMENT OF CHANGES IN RESERVESAT 31 MARCH 2017

RevenueReserve£’000

At 1 April 2016 37,059

Surplus for the year 1,618

Total Actuarial Gains 600

At 31 March 2017 39,277


STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2017

The financial statements on pages 28 to 59 were approved by the Board on 31st July 2017 and weresigned on its behalf by:

Chair of the Board Board Member Secretary

Note2017£’000

2016£’000

FIXED ASSETS

Intangible Assets 9 909 571

Housing Properties 10 116,156 112,951

Other Property Plant and Equipment 11 544 612

Investments - Homebuy Loans Receivable 12 664 631

118,273 114,765

CURRENT ASSETS

Inventories 13 44 44

Trade and Other Debtors 14 3,479 2,157

Cash and Cash Equivalents 22 2,427 3,992

5,950 6,193

Creditors: amounts falling due within one year 15 (8,290) (5,537)

NET CURRENT LIABILITIES (2,340) 656

TOTAL ASSETS LESS CURRENT LIABILITIES 115,933 115,421

Creditors: amounts falling due after more than one year 16 (53,789) (54,926)

Social Housing and Other Government Grants: amounts fallingdue after more than one year 17 (20,757) (21,096)

LGPS Pension Liability 23 (2,110) (2,340)

NET ASSETS 39,277 37,059

CAPITAL AND RESERVES

Non-equity Share Capital 19 - -

Comprehensive Income account 39,277 37,059

39,277 37,059


CASH FLOW STATEMENTFOR THE YEAR ENDED 31 MARCH 2017

Note 2017 2016

£’000 £’000 £’000 £’000

Net cash generated from operatingactivities 20 9,533 8,883

Cash Flows from investing activities

Purchase of intangible assets (732) (512)

Acquisition, construction andimprovement of housing properties (9,285) (10,379)

Acquisition, construction andimprovement of investment properties (69) -

Purchase of other property plant andequipment (87) (102)

Proceeds from sale of housingproperties 1,045 653

Proceeds from sale of investmentproperties 36 23

Grants received 58 875

Interest received 32 52

Net Cash Flows from investingactivities (9,002) (9,390)

Cash Flows from financing activities

Repayment of loans 21 - (18,900)

New loans 21 1,040 25,000

Loan arrangement and breakagecosts paid - (566)

Interest paid (3,136) (2,622)

Net Cash Flows from financingactivities (2,096) 2,912

Net increase in cash and cashequivalents 22 (1,565) 2,405

Cash and cash equivalents at 1 April2016 22 3,992 1,587

Cash and cash equivalents at 31March 2017 22 2,427 3,992



CASH FLOW STATEMENTFOR THE YEAR ENDED 31 MARCH 2017

Free cash flow Note 2017 2016

£’000 £’000

Net cash generated from operatingactivities 20 9,533 8,883

Interest paid (3,136) (2,622)

Interest received 32 52

Adjustment for reinvestment inexisting properties

Component replacements (5,232) (5,536)

Free cash generated before loanrepayments 1,197 777

Loans repaid (excluding refinancing) 21 - -

Free cash generated after loanrepayments 1,197 777

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017

1 ACCOUNTING POLICIES

The principal accounting policies are summarised below. They have all been applied consistentlythroughout the year and to the preceding year. The Board is satisfied that the current accounting policiesare the most appropriate for the Company.

(a) General Information and basis of accountingThe financial statements have been prepared under historical cost convention in accordance withFinancial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council and complywith the Statement of Recommended Practice for Registered Social Housing Providers 2014 (SORP),the Housing and Regeneration Act 2008 and The Accounting Requirements for Social LandlordsGeneral Determination (Wales) 2015. The Company is a public benefit entity, as defined in FRS 102and applies the relevant paragraphs prefixed “PBE” in FRS 102.

(b) TurnoverTurnover represents rental and other income receivable, grants for supported housing and otherrevenue grants receivable. Rental income is accounted for in full weeks. Rental income isrecognised from the point when properties under development reach practical completion orotherwise become available for letting. Revenue grants are receivable when the conditions forreceipt of agreed grant funding have been met. Amortisation of social housing and othergovernment grants is accounted for in line with the accounting policy.

(c) Sales of Properties and Fixed Asset InvestmentsSurpluses or deficits resulting from the sale of properties and fixed asset investments are shown inthe Statement of Comprehensive Income under surpluses / (deficits) on disposal of property, plantand equipment. Revenue is recognised on the completion of sales.

(d) Intangible AssetsIntangible assets are stated at historic cost or valuation, less accumulated amortisation and anyprovision for impairment. Amortisation is provided on all Intangible assets at rates calculated towrite off the cost or valuation of each asset on a straight-line basis over its expected useful life, asfollows:

Computer Software Development 33.3%

(e) Housing PropertiesHousing Properties are stated at cost less depreciation. Cost includes the cost of acquiring theland and buildings plus associated fees and works required to bring them into use.

Directly attributable costs are the labour costs of V2C arising directly from the acquisition ofHousing Properties, and incremental costs that would have been avoided only if individualproperties had not been acquired.

Any abortive costs incurred relating to developments that do not proceed are written off to theStatement of Comprehensive Income in the year identified as abortive.



(e) Housing Properties (continued)Depreciation is charged so as to write down the net book value of housing properties to theirestimated residual value, on a straight line basis, over their useful economic lives. Freehold land isnot depreciated.

Major Components of New Housing Properties and Purchased Housing Properties are depreciatedover their estimated elemental life span, on a straight line basis over the following periods:

• Heating Systems - 17 years

• Boilers – 12 years

• Kitchens – 15 years

• Lifts – 20 years

• Bathrooms – 25 years

• Electrical Systems and Whole House Rewires – 25 years

• Energy Production Equipment (PV and thermal Solar Panels & Air Source Heat Pumps) – 25 years

• External Wall Insulation – 25 years

• External Windows and Doors – 30 years

• Rain Water Goods – 15 years

• Roofs – 50 years

All other traditionally built New Housing Properties and Purchased Housing Properties capitalisedcosts are depreciated on a straight line basis over a period of 100 years.

All other non-traditionally built New Housing Properties and Purchased Housing Propertiescapitalised costs are depreciated on a straight line basis over a period of 50 years.

All other capitalised Housing Property Improvements are depreciated on a straight line basis over aperiod of 50 years.

ImprovementsWhere there are improvements to housing properties that are expected to provide incrementalfuture benefits, these are capitalised and added to the carrying amount of the property. Any worksto housing properties which do not replace a component or result in an incremental future benefitare charged as expenditure in surplus or deficit in the Statement of Comprehensive Income.

LeaseholdersWhere the rights and obligations for improving a housing property reside with the leaseholder ortenant, any works to improve such properties incurred by the Company is recharged to theleaseholder and recognised in surplus or deficit in the Statement of Comprehensive Income alongwith the corresponding income from the leaseholder or tenant.



(f) Impairment of housing propertiesReviews for impairment of housing properties are carried out on an annual basis and anyimpairment in an income is recognised in surplus or deficit in the Statement of ComprehensiveIncome. Impairment is recognised where the carrying value of an asset exceeds the higher of its netrealisable value or its fair value less costs to sell.

An impairment review has taken place on all of the Company’s Housing Properties as at the 31March 2017 and it is felt that the properties are not impaired.

(g) Non-housing property, plant & equipmentNon-housing property, plant and equipment is stated at historic cost less accumulated depreciationand any provision for impairment. Depreciation is provided on all non-housing property, plant andequipment, other than investment properties and freehold land, at rates calculated to write off thecost or valuation, less estimated residual value, of each asset on a straight-line basis over itsexpected useful life, as follows:

Office Improvements Over the remaining lives of the leasesFurniture, Fixtures & Fittings 10%Computers & Office Equipment 20%Plant & Tools 25%Vehicles 25%

(h) InventoriesInventories are stated at the lower of cost and net realisable value.

(i) Social Housing and Other Government GrantsWhere grants are received from government agencies such as the Welsh Government they arerecognised when there is reasonable assurance that the conditions attached to them will becomplied with and that the grant will be received.

Government grants are recognised using the accrual model and are classified either as a grantrelating to revenue or a grant relating to assets. Grants relating to revenue are recognised in incomeon a systematic basis over the period in which related costs for which the grant is intended tocompensate are recognised.

Grants relating to assets are recognised in income on a systematic basis over the expected usefullife of the asset. Grants received for housing properties are recognised in income over the expecteduseful life of the housing property structure. Where a grant is received specifically for components ofa housing property, the grant is recognised in income over the expected useful life of the component.

Grants received from non-government sources are recognised as revenue using the performancemodel.

At transfer from Bridgend County Borough Council in 2003 funding was received to compensate fora negative stock transfer value attributed to the housing stock transferred. This funding wasconsidered to be received to fund the repair and improvement programme, and is recognised overthe life of the component assets and structure to which it related.



(j) Recycling of GrantsWhere there is a requirement to either repay or recycle a grant received for an asset that has beendisposed of, a provision is included in the Statement of Financial Position to recognise thisobligation as a liability. When approval is received from the funding body to use the grant for aspecific development, the amount previously recognised as a provision for the recycling of thegrant is reclassified as accreditor in the Statement of Financial Position.

On disposal of an asset for which government grant was received, if there is no obligation torepay the grant, any unamortised grant remaining within liabilities in the Statement of FinancialPosition related to this asset is derecognised as a liability and recognised as revenue in surplus ordeficit in the Statement of Comprehensive Income.

(k) Pension CostsThe Company participates in two pension schemes:

1) The Social Housing Pension Scheme (the SHPS Scheme), a defined benefit scheme managed bythe Pensions Trust. The SHPS Scheme is an industry wide multi-employer scheme definedbenefit pension scheme where the scheme assets and liabilities cannot be separately identifiedfor each employer. This is accounted for as a defined contributions scheme as there isinsufficient information available to account for the scheme as defined benefit. For this multi-employer scheme, there is a contractual arrangement between the SHPS Scheme and theCompany that determines how the deficit will be funded and a liability is recognised in theStatement of Financial Position and the resulting expense in the surplus or deficit in theStatement of Comprehensive Income for the present value of the contributions payable thatarise from the agreement to the extent that they relate to the deficit.

2) The Local Government Pension Scheme (the LGPS Fund), a defined benefit scheme managed byRhondda Cynon Taf County Borough Council. The LGPS Fund is a multi-employer scheme whereit is possible for the Company to identify its share of the assets and liabilities of the scheme. Forthe LGPS Fund the amounts charged to operating surplus are the costs arising from employeeservices rendered during the year and the cost of plan benefit changes. They are included aspart of staff costs. The net interest cost on the net defined benefit liability is charged to revenueand included within finance costs. Re-measurement comprising actuarial gains and losses andthe return on scheme assets (excluding amounts included in net interest on the defined benefitliability) are recognised immediately in other comprehensive income.

(l) Interest payableBorrowing costs are interest and other costs incurred in connection with the borrowing of funds.Borrowing costs are calculated using the effective interest rate, which is the rate that exactlydiscounts estimated future cash payments or receipts through the expected life of a financialinstrument and is determined on the basis of the carrying amount of the financial liability at initialrecognition. Under the effective interest method, the amortised cost of a financial liability is thepresent value of future cash payments discounted at the effective interest rate and the interestexpense in a period equals the carrying amount of the financial liability at the beginning of aperiod multiplied by the effective interest rate for the period.



(m) Financial Instruments and loansFinancial assets and financial liabilities are recognised when the Company becomes a party to thecontractual provisions of the instrument.

Financial assets carried at amortised costFinancial assets carried at amortised cost comprise rent arrears, trade and other receivables andcash and cash equivalents. Financial assets are initially recognised at fair value plus directlyattributable transaction costs. After initial recognition, they are measured at amortised cost usingthe effective interest method. Discounting is omitted where the effect of discounting is immaterial.

If there is objective evidence that there is an impairment loss, the amount of the loss is measuredas the difference between the asset’s carrying amount and the present value of estimated futurecash flows discounted at the financial asset’s original effective interest rate. The carrying amount ofthe asset is reduced accordingly.

A financial asset is derecognised when the contractual rights to the cash flows expire, or when thefinancial asset and all substantial risks and reward are transferred.

If an arrangement constitutes a financing transaction, the financial asset is measured at thepresent value of the future payments discounted at a market rate of interest for a similar debtinstrument.

Financial liabilities carried at amortised costThese financial liabilities include trade and other payables and interest bearing loans andborrowings.

Non-current debt instruments which meet the necessary conditions in FRS 102, are initiallyrecognised at fair value adjusted for any directly attributable transaction cost and subsequentlymeasured at amortised cost using the effective interest method, with interest-related chargesrecognised as an expense in finance costs in the Statement of Comprehensive Income.Discounting is omitted where the effect of discounting is immaterial.

A financial liability is derecognised only when the contractual obligation is extinguished, that is,when the obligation is discharged, cancelled or expires.

Financing transactionsLoan arrangement fees are capitalised and recognised as expenditure over the terms of theloans.

(n) Operating LeasesLeases that do not transfer all the risks and rewards of ownership are classified as operatingleases.

Payments under operating leases are charged to surplus or deficit in the Statement ofComprehensive Income on a straight-line basis over the period of the lease.



(o) Value Added Tax (VAT)The Company is partially exempt for VAT purposes and charges VAT on some of its income and isable to recover part of the VAT it incurs on expenditure. The financial statements include VAT to theextent that it is suffered by the Company and not recoverable from HM Revenue and Customs. Thebalance of VAT payable or recoverable at the year-end is included as a current liability or asset.

(p) DebtorsShort term debtors are measured at transaction price less any impairment. Loans receivable aremeasured initially at fair value, net of transaction costs, and are measured subsequently atamortised cost using the effective interest method less any impairment. Where deferral ofpayment terms have been agreed at below market rate and where material, the balance isshown at the present value, discounted at a market rate.

(q) CreditorsShort term creditors are measured at the transaction price. Other financial liabilities including bankloans, are measured initially at fair value, net of transaction cost, and are measured subsequentlyat amortised cost using the effective interest method.

(r) Home buy optionWhere the Company received an allowance from Welsh Government to administer the sale ofproperty under the “Home Buy Option” initiative and in turn has made an interest free loan to thepurchaser secured by a charge on the property, the loan is accounted for under investments atcost with the associated grant included in long term liabilities on the statement of financialposition.

(s) Employee benefitsShort term employee benefits and contributions to defined contribution plans are recognised asan expense in the period in which they are incurred.



2 SIGNIFICANT MANAGEMENT JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates andassumptions that affect the application of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historical experience andvarious other factors that are believed to be reasonable under the circumstances, the results of whichform the basis of making the judgements about carrying values of assets and liabilities that are notreadily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised and in any future periods affected.

(a) Significant management judgementsThe following are management judgements in applying the accounting policies of the Companythat have the most significant effect on the amounts recognised in the financial statements.

Impairment of social housing properties

The Company has to make an assessment as to whether an indicator of impairment exists. Inmaking the judgement, management considered the detailed criteria set out in the SORP.

(b) Estimation uncertaintyThe Company makes estimates and assumptions concerning the future. The resulting accountingestimates will, by definition, seldom equal the related actual results. The estimates andassumptions that have a significant risk of causing a material adjustment to the carrying amountsof assets and liabilities within the next financial year are addressed below.

(c) Fair value measurementManagement uses valuation techniques to determine the fair value of assets. This involvesdeveloping estimates and assumptions consistent with how market participants would price theinstrument. Management base the assumptions on observable data as far as possible but this isnot always available. In that case, management uses the best information available. Estimatedfair values may vary from the actual process that would be achievable in an arm’s lengthtransaction at the reporting date.

(d) Provisions Provisions require management’s best estimate of the costs that will be incurred based onlegislative and contractual requirements. In addition, the timing of the cash flows and the discountrates used to establish net present value of the obligations require management’s judgement.

(e) Defined benefit pension schemeThe Company has obligations to pay pension benefits to certain employees. The cost of thesebenefits and the present value of the obligation depend on a number of factors, including; lifeexpectancy, salary increases, asset valuations and the discount rate on corporate bonds.Management estimates these factors in determining the net pension obligation in the Statement ofFinancial Position. The assumptions reflect historical experience and current trends.



2a TURNOVER, OPERATING COSTS ANDOPERATING SURPLUS / (DEFICIT)

Turnover£’000

Operatingcosts£’000

2017 Operatingsurplus /(deficit) £’000

2016 Operatingsurplus /(deficit) £’000

Income and Expenditure from lettings

General needs housing accommodation 25,156 (21,042) 4,114 3,890

Supported, Sheltered and Extra-Care HousingAccommodation 1,478 (1,732) (254) (105)

Fully Rented Housing Accommodation 26,634 (22,774) 3,860 3,785

Commercial 201 (174) 27 76

Garages and garage bases 206 (153) 53 56

Development costs not capitalised - (201) (201) (124)

Total from lettings 27,041 (23,302) 3,739 3,793

Leaseholders 161 (179) (18) (4)

Big Lottery Fund Grant 87 (87) - -

Other activities 515 (343) 172 69

27,804 (23,911) 3,893 3,858

2b INCOME AND EXPENDITURE FROMSOCIAL HOUSING LETTINGS

General NeedsHousing

Accommodation£’000

Supported,Sheltered and

Extra-CareHousing


2017 Total £’000

2016 Total £’000

Income

Rent receivable 24,128 925 25,053 24,233

Service charges receivable 191 486 677 622

Grant for supported housing - 67 67 118

Amortisation of social housing and othergovernment grants 837 - 837 779

Turnover from social housing lettings 25,156 1,478 26,634 25,752



2b INCOME AND EXPENDITURE FROMSOCIAL HOUSING LETTINGS (Continued)

General NeedsHousing


Supported,Sheltered and

Extra-CareHousing


2017 Total £’000

2016 Total £’000

Costs

Housing Management 3,541 92 3,633 3,534

Housing Services 1,172 868 2,039 2,001

Maintenance - reactive 6,415 252 6,667 6,984

Maintenance - cyclical 581 121 702 678

Planned maintenance and major repairs 3,146 24 3,170 3,124

Depreciation of housing properties 5,514 351 5,865 5,138

Depreciation of other fixed assets 514 18 532 366

Rent loss from bad debts 160 6 166 142

Operating costs on social housing lettings 21,042 1,732 22,774 21,967

Operating surplus / (deficit) on socialhousing lettings 4,114 (254) 3,860 3,785

Rent loss due to voids (memorandum note) (432) (40) (472) (563)

3 SALES OF HOUSING PROPERTIES ANDOTHER FIXED ASSETS

2017 £’000

2016 £’000

Sales proceeds 1,088 717

Costs of sales (136) (140)

Surplus on disposal 952 577



5 TAXATION

On 16th March 2007 the legal status of the Company changed to become that of a Community BenefitSociety with charitable status. As a result the Company has no liability to Corporation Tax on itscharitable activities from that date.

4 INTEREST AND FINANCING COSTS2017 £’000

2016 £’000

Loans and bank overdrafts 3,169 3,111

Unwinding of SHPS discount factor (note 23) 10 7

Net Interest on LGPS defined benefit liability (note 23) 80 120

Loan Breakage Fees - 278

3,259 3,516

6 SURPLUS ON ORDINARY ACTIVITIES2017 £’000

2016 £’000

Surplus on ordinary activities is stated after charging:

Staff costs 6,857 6,817

Depreciation of housing properties (Note 10) 5,876 5,138

Depreciation of intangible assets (Note 9) 394 208

Depreciation of other property plant and equipment (Note 11) 155 177

Amortisation of government grants (837) (779)

Auditors’ remuneration (inclusive of VAT):

In their capacity as auditors 19 19

In respect of other services - -



7 STAFF COSTS2017 £’000

2016 £’000

Staff costs including directors:

Wages and salaries 6,101 6,081

Social security costs 575 449

Other pension costs – Employer’s contributions 614 629

Other pension costs – Difference between LGPS current and past servicecost and contributions payable (Note 23) 303 357

7,593 7,516

In addition to the above were payments in respect of redundancy, earlyretirement, in lieu of notice and equal pay claims 224 18

Average number of persons expressed as full time equivalentsemployed during the year:

2017 Number

2016 Number

Management and administration 121 122

Scheme co-ordinators, community caretakers and cleaners 22 23

Housing Repair Service (operatives) 88 87

Total number of employees expressed as full time equivalents 231 232

Average number of employees during the year:

Management and administration 129 129

Scheme co-ordinators, community caretakers and cleaners 25 26

Housing Repair Service (operatives) 89 87

Average total number of employees 243 242



8 DIRECTORS’ EMOLUMENTS2017 £’000

2016 £’000

The remuneration paid to the directors and senior officers including theChief Executive was:

Emoluments (including employer’s pension contributions) 232 217

The emoluments of directors and senior officers disclosed above(excluding pension contributions) include amounts paid to:

The highest paid director 111 109

The full time equivalent number directors and staff to whomemoluments were payable in excess of £50,000 (excluding pensioncontributions) fell within the bands:

2017 Number

2016 Number

£50,001 - £60,000 5 6

£80,001 - £90,000 - 1

£90,001 - £100,000 1 -

£100,001 - £110,000 - 1

£110,001 - £120,000 1 -

None of the members of the Board received any emoluments.

Expenses paid during the year to Board Members amounted to £2,200 (2016 – £1,500).

The Chief Executive, Mr Stephen Cook, is an ordinary member of the SHPS pension scheme and noenhanced or special terms apply. The employers pension contribution in respect of the Chief Executivewas £11,000 (2016: £11,000). The Company does not make any further contribution to any individualpension arrangements for the Chief Executive.



9 INTANGIBLE ASSETS

ComputerSoftware

£’000

COST

At 1 April 2016 1,458

Additions 732

Disposals -

At 31 March 2017 2,190

DEPRECIATION

At 1 April 2016 887

Charge for the year 394

Eliminated on disposals -

At 31 March 2017 1,281

NET BOOK VALUE

At 31 March 2017 909

At 31 March 2016 571



10 HOUSING PROPERTIES

HousingPropertiesheld forletting £’000

HousingProperties

underconstruction

£’000

HousingProperties

Total£’000

COST

At 1 April 2016 141,792 6,478 148,270

Additions 6,007 3,275 9,282

Transferred on Completion 5,627 (5,627) -

Abortive Development Costs - (111) (111)

Disposals (136) - (136)

At 31 March 2017 153,290 4,015 157,305

DEPRECIATION

At 1 April 2016 (35,319) - (35,319)

Charge for the year (5,876) - (5,876)

Eliminated on disposals 46 - 46

At 31 March 2017 (41,149) - (41,149)

NET BOOK VALUE

At 31 March 2017 112,141 4,015 116,156

At 31 March 2016 106,473 6,478 112,951


2017 £’000

2016 £’000

Improvements to freehold land and buildings 82,046 82,202

Purchase of freehold properties and new development 30,095 24,271

112,141 106,473

Housing and other properties held for letting comprise:


2017 £’000

2016 £’000

Planned maintenance and major repairs (revenue) 3,170 3,124

Improvements (capital) 5,232 5,536

11 OTHER PROPERTY PLANTAND EQUIPMENT

Office Improvements

£’000

Furniture,fixtures &

fittings£’000

Computers& office

equipment£’000

Plant &tools£’000

Vehicles£’000

Total£’000

COST

At 1 April 2016 572 200 849 61 17 1,699

Additions - 50 19 8 10 87

Disposals - - - - - -

At 31 March 2017 572 250 868 69 27 1,786

DEPRECIATION

At 1 April 2016 234 160 625 54 14 1,087

Charge for the year 48 7 93 4 3 155

Eliminated on disposals - - - - - -

At 31 March 2017 282 167 718 58 17 1,242

NET BOOK VALUE

At 31 March 2017 290 83 150 11 10 544

At 31 March 2016 338 40 224 7 3 612


10 HOUSING PROPERTIES (Continued)

Major repairs and improvement expenditure on existing properties during the year amounted to£8,402,000 (2016 - £8,660,000). This has been accounted for as follows:


Investments - Homebuy Loans Receivable represent long term loans provided to individuals purchasingproperties under the “Home-Buy Initiative”. Where properties funded by Social Housing Grant aredisposed of, the grant is required to be either recycled to fund new Social Housing or repaid to theWelsh Government.

12 INVESTMENTS - HOMEBUY LOANS RECEIVABLE

GrantFunded £’000

Non-GrantFunded £’000

Total£’000

COST

At 1 April 2016 124 507 631

Additions - 69 69

Disposals - (36) (36)

At 31 March 2017 124 540 664

13 INVENTORIES2017 £’000

2016 £’000

Stock of materials 44 44

14 TRADE AND OTHER DEBTORS2017 £’000

2016 £’000

Amounts falling due within one year:

Gross rent and service charge arrears 1,602 1,435

Less: provision for bad debts (725) (612)

Net rent and service charge arrears 877 823

Other debtors 1,769 691

Prepayments and accrued income 833 643

3,479 2,157



15 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Note2017 £’000

2016 £’000

Loans (Note 18) 1,800 -

Social housing and other grants received in advance 22 77

Trade creditors 1,849 1,560

Other taxation and social security costs 153 125

Rent and service charges received in advance 298 299

Leaseholder repairs reserves 181 184

Retentions 316 287

Social Housing and Other Government Grants 17 775 779

SHPS Pension Deficit Provision 430 62

Accruals and deferred income 2,466 2,164

8,290 5,537

16 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR2017 £’000

2016 £’000

Loans due between 1 and 5 years 15,840 12,600

Loans due greater than 5 years 38,500 42,500

Less deferred loan arrangement fees (610) (640)

53,730 54,460

Recycled Capital Grant Fund 20 20

SHPS Pension Deficit Provision 39 446

53,789 54,926

2017 £’000

2016 £’000

Recycled Capital Grant Fund

At 1 April 2016 20 -

Additions - 20

At 31 March 2017 20 20



18 DEBT ANALYSIS2017 £’000

2016 £’000

Housing Loans – due within one year

Bank Loans – revolving loan facility 1,800 -

Housing Loans – due after more than one year

Bank Loans – long term loan facility (Repayable within five years) 15,840 12,600

Bank Loans – long term loan facility (Repayable after five years) 38,500 42,500

The loans are secured by specific charges on the Company’s housing properties and a fixed chargeover the entire undertaking and are repayable as follows:

- £10.0 million at a fixed rate of 6.70% until repayment in installments from December 2025 toDecember 2028;

- £20.1 million at a fixed rate of 6.96% until repayment in instalments from March 2018 to March 2025.

- £25.0 million at a fixed rate of 3.935% until repayment in instalments from April 2036 to April 2045.

- £1.1 million interest free, repayable between June 2019 and March 2022.

At 31 March 2017, the Company had un-drawn loan facilities of £5.0 million (2016 - £5.0 million).Commitment fees also apply at a rate of 0.725% on the undrawn balance.


17 DEFERRED INCOME - GOVERNMENT GRANTS2017 £’000

2016 £’000

As at 1st April 2016 21,875 21,767

Grant Receivable 471 907

Amortisation to Statement of Comprehensive Income (814) (779)

Transferred to RCGF - (20)

At 31 March 2017 21,532 21,875

Due within one year 775 779

Due after one year 20,757 21,096

21,532 21,875


20 RECONCILIATION OF OPERATING SURPLUS TO CASH GENERATEDFROM OPERATING ACTIVITIES

2017 £’000

2016 £’000

Operating surplus for the year 3,893 3,858

Depreciation charges 6,425 5,523

Amortisation of social housing and other government grants (837) (779)

Abortive development costs 111 17

LGPS - difference between current service cost and the contributions paid 287 357

SHPS - past deficit contributions paid (13) (43)

Movement in bad debt provision (113) (45)

Movement in debtors (1,209) 237

Movement in creditors 989 (241)

Movement in stock - (1)

Cash generated from operating activities 9,533 8,883

21 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT2017 £’000

2016 £’000

(Decrease) / increase in cash (1,565) 2,405

Cash (inflow) from increase in debt (1,040) (6,100)

Change in net debt resulting from cash flows (2,605) (3,695)

Movement in net debt in the year

Net debt at 1 April (51,108) (47,413)

Net debt at 31 March (53,713) (51,108)


19 NON-EQUITY SHARE CAPITAL2017

£2016

£

Shares of £1 each fully paid and issued:

At 1 April 2016 54 53

Issued during the year 1 3

Cancelled during the year (3) (2)

At 31 March 2017 52 54

The shares provide members with the right to vote at general meetings. The shares carry no right to adividend, there is no provision for the redemption of shares and there is no provision for a distributionfollowing a winding up.

23 PENSION OBLIGATIONS

Up to 31 March 2008 the Company’s employees were eligible to join either the Social Housing PensionScheme (the SHPS Scheme) or the Rhondda Cynon Taf County Borough Council Pension Fund, which ispart of the Local Government Pension Scheme (the LGPS Fund). From 1 April 2008 the Company’semployees, not already members of either Pension Scheme, were only eligible to join benefit structuresunder the SHPS Scheme. Further information on each scheme is given below.

SHPS – General InformationThe SHPS Scheme is a multi-employer scheme which provides benefits to some 500 non-associatedemployers. The Scheme is a defined benefit scheme in the UK. It is not possible for the Company toobtain sufficient information to enable it to account for the SHPS Scheme as a defined benefit scheme.Therefore it accounts for the SHPS Scheme as a defined contributions scheme.

As at the 31 March 2017 there were 94 active members of the Scheme employed by the Company. TheCompany continues to offer membership of the Scheme to its employees.

In respect of the Final Salary with 1/60th accrual rate benefit structure the Company paid contributions atthe rate of 10.6% during the year. Member contributions vary between 8.4% and 10.4% depending ontheir age.

In respect of the Career Average Re-valued Earnings (CARE) with 1/60th accrual rate benefit structure theCompany paid contributions at the rate of 8.8% during the year. Member contributions vary between6.3% and 8.3% depending on their age.

The SHPS Scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came intoforce on 30 December 2005. This, together with documents issued by the Pensions Regulator andTechnical Actuarial Stanadards issued by the Financial Reporting Council, set out the framework forfunding defined benefit occupational pension schemes in the UK.

The SHPS Scheme is classified as a “last-man standing arrangement”. Therefore the Company ispotentially liable for other participating employers’ obligations if those employers are unable to meet theirshare of the scheme deficit following withdrawal from the SHPS Scheme. Participating employers arelegally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawalfrom the SHPS Sceme.



22 ANALYSIS OF CHANGES IN NET DEBT

At 1 April2016 £’000

CashFlows £’000

At 31 March2017 £’000

Cash at Bank and in hand 3,992 (1,565) 2,427

Loans – Revolving loan facility - - -

Loans – Long term loan facility (55,100) (1,040) (56,140)

(51,108) (2,605) (53,713)


23 PENSION OBLIGATIONS (continued)

A full actuarial valuation for the SHPS Scheme was carried out with an effective date of 30 September2014. This actuarial valuation was certified on 23 November 2015 and showed assets of £3,123 million,liabilities of £4,446 million and a deficit of £1,323 million. To eliminate this funding shortfall, the trusteesand the participating employers have agreed that additional contributions will be paid, in combinationfrom all employers, to the SHPS Scheme as follows:

• Tier 1 - from 1 April 2016 to 30 September 2020 - £40.6 million (payable monthly and increasing by4.7% each year on 1 April);




Where the scheme is in deficit and where the Company has agreed to a deficit funding arrangement, theCompany recognises a liability for this obligation. The amount recognised is the net present value of thedeficit reduction contributions payable under the agreement that relates to the deficit. The present value iscalculated using the discount rate detailed in these disclosures. The unwinding of the discount rate isrecognised as a finance cost.

The Company has been notified by The Pensions Trust of the estimated employer debt on withdrawalfrom SHPS Scheme based on the financial position of the Scheme as at 30 September 2016. At this datethe estimated employer debt for the Company was £7,531,000.

SHPS Scheme - Present Values of Provision2017 £’000

2016 £’000

2015 £’000

Present value of provision 469 508 363

SHPS Scheme - Reconciliation of Opening and Closing Provisions2017 £’000

2016 £’000

Provison at 31 March 2016 508 363

Unwinding of the discount factor (interest expense) 10 7

Deficit Contributions paid (62) (43)

Remeasurements – impact of any changes in assumptions 13 (3)

Remeasurements – amendments to the contribution schedule - 184

Provision at 31 March 2017 469 508




SHPS Scheme - Assumptions2017

% p.a.2016 % p.a.

2015 % p.a.

Rate of discount 1.33% 2.06% 1.92%

SHPS Scheme – Statement of Comprehensive Income Impact2016 £’000

2016 £’000

Interest Expense 10 7

Remeasurements – impact of any changes in assumptions 13 (3)

Remeasurements – amendments to the contribution schedule - 184

Contributions paid in respect of future service 230 212

Costs recognised in statement of comprehensive income 253 400

The discount rates shown above are the equivalent single discount rates which, when used to discountthe future recovery plan contributions due, would give the same results as using a full AA corporate bondyield curve to discount the same recovery plan contributions.

The disclosures below relate to the funded liabilities within the Rhondda Cynon Taf County BoroughCouncil Pension Fund which is part of the Local Government Pension Scheme (LGPS Fund) The LGPS Fundis a defined benefit scheme with benefits earned up to 31 March 2014 being linked to final salary. Benefitsafter 31 March 2014 are based on a Career Average Revalued Earnings scheme. Details of the benefitsearned are set out in “The Local Government Pension Scheme Regulations 2013” and “The LocalGovernment Pension Scheme (Transitional Provisions, Savings and Amendment Regulations 2014”.

LGPS Fund – General InformationThe employer contributions paid for the year were £416,000 (2016 - £417,000)

The latest actuarial valuation of the Company’s liabilities took place on 31 March 2016. Liabilities havebeen estimated by the independent qualified actuary on the actuarial basis using the projected unit creditmethod.




LGPS Fund – Principal Financial AssumptionsThe principal assumptions used by the actuary in updating the latest valuations of the LGPS Fund for FRS102 purposes were:

The approximate split of assets for the LGPS Fund as a whole (based on data supplied by the FundAdministering Authority) is shown in the table below.

2017 % p.a.

2016 % p.a.

2015% p.a.

Discount rate 2.6 3.5 3.2

Rate of general increase in salaries 3.25 3.3 3.3

Rate of increase to pensions in payment 2.0 1.8 1.8

Rate of increase to deferred pensions 2.0 1.8 1.8

Rate of Inflation (RPI) 3.1 2.9 2.9

Rate of inflation (CPI) 2.0 1.8 1.8

2017 Asset Split

%

2016 Asset Split

%

2015Asset Split

%

Equities 72.6 70.1 69.0

Government Bonds 9.4 9.2 9.7

Corporate Bonds 10.0 10.6 11.7

Property 5.9 6.4 5.6

Cash 2.1 3.7 4.0

Total 100.0 100.0 100.0




LGPS Fund - Mortality AssumptionsThe mortality assumptions are based on the recent actual mortality experience of members within theLGPS Fund and allow for expected future mortality improvements.

Post Retirement Mortality - Males 2017 2016

Year of Birth base table Standard SAPS

Normal Health AllAmounts

Standard SAPSNormal Health All

Amounts

Rating to the above base table (years) 0.0 0.0

Scaling to above base tables 100% 100%

Improvements to base table rates

CMI 2012 with along term rate ofimprovement of

1.5%pa


1.5%pa

Future lifetime from age 65 (currently aged 65) 22.8 years 23.1 years


Post Retirement Mortality - Females 2017 2016

Year of Birth base table Standard SAPS

Normal Health AllAmounts

Standard SAPSNormal Health All

Amounts

Rating to the above base table (years) 0.0 0.0

Scaling to above base tables 95% 95%

Improvements to base table rates


1.5%pa


1.5%pa






LGPS Fund - Reconciliation of funded status to Statement of Financial Position

2017 £’000

2016 £’000

Fair value of assets 30,650 25,680

Present value of funded liabilities (32,760) (28,020)

Net pension liability (2,110) (2,340)

LGPS Fund – Amounts recognised in other comprehensive income2017 £’000

2016 £’000

Asset gains arising during the year 4,310 100

Liability (losses) / gains during the year (3,710) 1,780

Total amount recognised in other comprehensive income 600 1,880

LGPS Fund – Amounts recognised in income statement2017 £’000

2016 £’000

Operating cost

Current service cost 680 780

Past service cost 30 -

Financing cost

Interest on net defined liability 80 120

Pension expense recognised in surplus for the year 790 900

LGPS Fund - Changes to the present value of defined benefitobligations

2017 £’000

2016 £’000

Present value of liabilities at 31 March 2016 28,020 28,590

Current service cost 680 780

Past service cost 30 -

Interest expense on defined benefit obligation 970 910

Contributions by participants 180 190

Actuarial losses / (gains) on liabilities 3,710 (1,780)

Net benefits paid out (830) (670)

Present value of liabilities at 31 March 2017 32,760 28,020




LGPS Fund - Changes to the fair value of assets2017 £’000

2016 £’000

Fair value of assets at 31 March 2016 25,680 24,850

Interest income on assets 890 790

Remeasurement gains on assets 4,310 100

Contributions by the Company 420 420

Contributions by participants 180 190

Net benefits paid out (830) (670)

Fair value of assets at 31 March 2017 30,650 25,680

LGPS Fund - Actual return on assets2017 £’000

2016 £’000

Interest income on assets 890 790

Remeasurement gains on assets 4,310 100

Actual return on assets 5,200 890

FundingThese will be funded by existing loan facilities as detailed in Note 18, and by Social Housing Grant.

24 CAPITAL COMMITMENTS2017£’000

2016£’000

Capital expenditure contracted but not provided for in the financialstatements 5,340 2,507

Capital expenditure authorised by the Board but not contracted 11,156 6,675


26 HOUSING STOCK2017

Number2016

Number

Number of units in managementHousing accommodation for letting:General housing – Social rents 5,589 5,578

General housing – Intermediate rents 26 25

General housing – Market rents 1 1

Supported, Sheltered and Extra-Care housing 219 213

Total rented 5,835 5,817

Other units:

Low Cost Home Ownership 17 16

Right-to-buy leases 722 734

Garages 1,129 1,129

Commercial Property leases (less than 21 years) 29 29

Commercial Property leases (21 years or more) 21 21

25 OTHER FINANCIAL COMMITMENTS

At 31 March 2017 the total future minimum lease payments under non-cancellable operating leases areas follows:

2017 2016

Land andbuildings

£’000Other£’000

Land andbuildings

£’000Other£’000

Payments due:

Within one year 251 335 251 133

Between one and five years 814 1,030 920 442

After five years 191 12 256 7

1,256 1,377 1,427 582




27 RELATED PARTIES

Two of the Board members who held office during the year are also tenants. The tenancies are onnormal commercial terms and the Board members cannot use their position to their advantage. One ofthe Board members who held office during the year is also a leaseholder. The lease is on normalcommercial terms and the Board member cannot use his position to his advantage. Three of the Boardmembers who held office during the year are Councillors of Bridgend County Borough Council (BCBC).Any transactions with BCBC are made at arm’s length, on normal commercial terms and the CouncilBoard members cannot use their position to their advantage.

28 ESTABLISHMENT OF THE COMPANY

The Company is a Registered Society with charitable rules under the Co-operative and CommunityBenefit Societies Act 2014 (Registration Number 30205R). Its activities are regulated by the WelshGovernment as a Registered Social Landlord under the Housing Association Act 1985 (RegistrationNumber L137).

29 CONTINGENT LIABILITIES

Social Housing Grant may become repayable in the following circumstances:

• Disposal of a property (including disposals on assisted ownership terms) other than to anotherRSL;

• Change of use of a property to a use that would be eligible for a lesser amount of grant;

• Change of use of a property to a use that would not be eligible for a grant;

• Demolition of a property where the site does not form part of a new social housing developmentby a RSL; or

• A disposal giving rise to a repayment of discount under Schedule 2 to the Housing Association Act1985.

The Company amortises Social Housing Grants over the useful life of the properties, as required byHousing SORP 2014. Although the Company has no current plans to sell its housing land and buildings;if it were to, then Social Housing Grants may become repayable. The total contingent liability as at 31March 2017 is £14,795,000 (2016 £14,324,000).


Tremains Business Park, Tremains Road, Bridgend, CF31 1TZ0300 123 2100www.v2c.org.uk

Documents

FINANCIAL STATEMENTS · 2017. 8. 31. · STATEMENT OF CASHFLOWS 30 - 31 NOTES TO THE FINANCIAL STATEMENTS 32 - 59 2 VALLEYS TO COAST HOUSING LIMITED. INFORMATION BOARD MEMBERS (as